“(Former Fed Governor) Kevin Warsh and (Nobel Economics Laureate) Mike Spence wrote a good primer that should be read by all presidential candidates (“The Fed Has Hurt Business Investment,” op-ed, Oct. 27). I especially like it because it repeats everything I said for years as president of the Federal Reserve Bank of Dallas…

…and as a participant in the deliberations of the Fed’s Open Market Committee. The problem is that the writers offer no tangible solution to the problems they so capably describe… Monetary policy, especially quantitative easing, has made the rich richer (Democrats and Republicans can agree on that) but fiscal and regulatory policy has made conditions worse for middle-income groups, undermining the economy. Easy money was supposed to go into creating meaningful jobs for middle-income, hardworking Americans; fiscal policy and regulatory policy has discouraged it from working….. We do not need more easy money. We need tax, spending and regulatory (and educational) policy—none of which is within the capacity of the Fed—to encourage investment in new, higher-paying jobs.”, Richard Fisher, The Wall Street Journal, October 29, 2015

Congress, Not the Fed, Must Act for Growth

We do not need more easy money. We need tax and spending and regulatory (and educational) policy—none of which is within the capacity of the Fed.

Kevin Warsh and Mike Spence wrote a good primer that should be read by all presidential candidates (“The Fed Has Hurt Business Investment,” op-ed, Oct. 27). I especially like it because it repeats everything I said for years as president of the Federal Reserve Bank of Dallas and as a participant in the deliberations of the Fed’s Open Market Committee.

The problem is that the writers offer no tangible solution to the problems they so capably describe. This is where presidential aspirants come in. Monetary policy, especially quantitative easing, has made the rich richer (Democrats and Republicans can agree on that) but fiscal and regulatory policy has made conditions worse for middle-income groups, undermining the economy. Easy money was supposed to go into creating meaningful jobs for middle-income, hardworking Americans; fiscal policy and regulatory policy has discouraged it from working. The simple analogy is this: The Fed filled the gas tank of the car that is the economy and then some—the tank is overflowing—but only Congress and the executive can provide the incentive for job creators (80%-plus of jobs are created by small- and medium-size businesses) to step on the accelerator and drive the engine of job creation forward. Without proper fiscal and regulatory policy, loose monetary policy represents pushing on a string.

We do not need more easy money. We need tax, spending and regulatory (and educational) policy—none of which is within the capacity of the Fed—to encourage investment in new, higher-paying jobs.

During the crisis and the early recovery, I said in public that “the U.S. economy was the best looking horse in the glue factory” but “proper fiscal and regulatory policy, monetary policy could be harnessed to transform us into the economic equivalent of Secretariat winning by 30 lengths at Belmont in 1973.” We need a president who will jockey that transformation.

My vote for president will go to that candidate who will have the most convincing plan for transforming our economy back into being the most muscular thoroughbred on the global economy racetrack.

Mike, this is so basic and so obvious and the lack of true beneficial effect on the “real” economy resulting from central bank policy (here or Japan) that it baffles the mind that we continue down this (same) path time after time….